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tv   United Airlines CEO Apologizes for Breach of Trust  CSPAN  May 2, 2017 9:33am-11:31am EDT

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i want to recognize for a
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motion. i move that the chairman be authorized to declare recess during today's hearing. >> all of those opposed say nay. the motion is agreed to. i first want to start with thanking all of the witnesses here today. i accepted our invitation to testify on this oversight hearing on the airline customer service. we invited all of them to participate. you are the brave few regarding the treatment of passengers. our travel can be a stressful experience as many of us knows we are passengers. many knows we are passengers on a twice a week basis. anyone who flies knows getting on a plane can be stressful. getting to the airport, checking
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in, getting to your security, ask rattle the most seasoned traveler. the whole process starts with the purchase of a ticket. there is an expectation they will be treated fairly. there is also an expectation the ticket will be honored and they will get them to their destination safely. i used to be in business, in fact i was in business for 20 years. one of the rules is that the customer comes first.
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members of congress fly a lot. many constituents and those watching online. we have all been in a situation where we want to get to our seat, get in the air and get home as quickly as possible. but imagine almost 7 hours into a long flight and you get ripped out of your seat and thrown off of the plane and get your teeth knocked out. or imagine getting your infant child on a flight. this 2 million people will fly today or something close to 2 million and they are tired of
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being treated inappropriately without courtesy. something is broken and the obvious divide need to be address. that's why we are here today. we are here to learn. we want to learn, hear the breakdown and response is from the industry to make sure it doesn't happen again. to learn about these customer service policies what are you doing to improve service experience? what needs to be done to make it not happen again or never happen again. this won't be a pleasant hearing for witnesses today but i want it to be constructive. i want to stress that. this needs to be constructive. we need to come out of here with a better understand on how the airlines operate and better understanding of what the response to the airline industry is going to do to change to make sure that steps are taken to improve customer service. i know mr. munoz has been on tv,
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others have made changes to the way they operate. it is a positive first step but it's only a first step. this issue is not going away. we are not going away. we will hold you accountable and expect real results. as a general rule i don't believe in overburdening our businesses. i should need to repiend you congress will not need to react chen customers are treated with respect they deserve. if we don't see meaningful results that improve customer service the next time they meet i can assure you you won't like the outcome. so again, i want it to be a constructive hearing today, and i appreciate the witnesses being here today. it will be a tough hearing today. with that i would like to
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recognize him for five minutes to make an opening statement. >> thank you, mr. chairman. obviously i appreciate you holding our hearing. a number of us ask for a hearing. i'm pleased we are here today for the hearing, not pleased for the circumstances. i would say today's hearing is really the culmination of a deterioration we have seen over a number of years. i mean just think back to last summer. hundreds of thousands of people were stranded and displaced for days because of major computer meltdowns including southwest who is represented here today. airplanes, you're very good at filling them up but they often don't have a single empty seat. the new high profile seats are great. you jam more people into the cabin.
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it is certainly testing the patience of passengers and pesting the patience of the flight crew. just last month we saw an american airlines flight attendant trying to into a physical fight. tempers are short everywhere and of course dr. dao and that incident. i know you have apologized and i'm interested what you will tell us here today about why it will never happen again and how things are going improve. my first term in congress i introduced an airline passenger equity act to keep airlines accountable to their passengers. among other things it would have required them to report information regarding flight delays, cancellations, luggage status performance, bumped passengers. some were included in the passenger act of '87. 30 years later i think there's a lot of improvement.
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i think we are here today to look and hear about where we could prod, push or regulate or legislate to get better service for passengers. today ranking member larson and i are requested a gao study of wi what has gone wrong with the airline system. we have seen massive consolidation. we have 80% of the market. and, you know, less than a decade ago we had much more diversity and much more concentration. load factors are near a 15 year high. denied boarding is 40,000 passengers. a lot of people don't have a choice anymore. we adhere that the big problems are air traffic control. 60% of delays were caused by factors within the airlines
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control. as a recent article by an advocate they said you can't take 15 or 20 planes off in a one-minute period from any airport. no matter what you have as a system yet airlines insist on scheduling that way. and their dispatch systems and other things. the so-called passengers rights, when they are told to look at your contract of carriage their contracts of carriage i would say are deliberately on cured in terms of legal lease. some airlines -- which one is this? okay. these are the contracts of carriage. some of them are 37,000 words, 67 pages long. you know, i would say very few passengers have any idea what
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their rights are. i had a staff member, after we were talking about this, decided to print out the contract of carriage and found there was a delay within the control which required her to get compensated as she paged through the whole thing and found that. how many people have the pay patience to do that? we need dits closure. that is what lead to the incident with united is the limitations and the policies. respective larson and i, the know before you fly act and it would require that the airlines provide information to the public regarding policies from assisting passengers during widespread disruptions. as we have seen the concentration grow for a long time the airlines neglected their infrastructure. we had the incidents last summer
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with dispatch and with ticketing. that really shows to me that this is all being drif p by the bottom line and not by customer service. we have to get customer service back in there. now we are being pressured by the airlines to privatize the air traffic control system and put them in effect of the governing board. it needs to focus on getting its own house in order. the airlines lack of focus on the traveling focus only add to the many reasons i will continue to oppose privatization. mr. chairman, i thank you for the time and look forward to the testimony. >> okay. we'll we would like to welcome for five minutes. >> thank you. i was keeply troubled by -- deeply troubled by the events
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that happened last month. no one should ever be treated that way. these incidents, these situations need to be reck can go noised but the recent ups upsetting incidents were absolutely avoidable.
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airlines need to clearly communicate their policies and use good old fashioned common sense when applying those policies especially during those situations. we'll hear to ensure passengers ensure the best customer service possible and i look forward to a discussion. i would like to hear what they are doing to uphold their commitments and ensure they are paying in a fair and respectful manner. it is their responsibility to make sure airlines follow through on these commitments and we'll continue our oversight efforts to ensure positive changes made as a result to recent customer service are not just a temporary response to the media spotlight. i want to thank the witnesses today and look forward to hearing the testimony. i yield back. >> thank you, gentlemen. i would like to welcome larson for opening statement. >> thank you for holding today's
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hearing. i don't want to belabor all of the points. i will be brief. i do want to note, mr. munoz, i want to make clear what happened cannot happen again. we are here to discuss what went wrong and how such a scenario can be prevented from being happened again. the incident was a result of united airlines policy failures. in truth these problems are not specific to united. several have reck koog noised rooms for their bookings and overbookings and have announced changes in recent weeks. employees must em ply with passengers. in that same spirit this morning we requested dive deeper into
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consumer protection. understanding current protections and identifying any gaps will be as we develop consumer protections. earlier this year they introduced two sure fire ways to address that ruin someone's flight. unexpected fees and lengthy delays. it would ensure airlines remain transparent and would require at the time of ticket purchase what they will and will not do. would also like to note it means we must recognize the means of persons with disabilities. i was pleased at last year's aviation extension bill requiring the d.o.t. to move forward with a rule making.
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she a senior vice president for ak alaska airlines. it is chief commercial officer. miss carry, senior vice president of customer experience and aviation consultant and consumers union. i look forward to hearing your
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testimony and i ask you that all of our full statements. since your written testimony they would request you you limit your opening statements to five minutes w. that, mr. munoz, you may proceed. microphone. >> thank you -- >> you might want to pull it closer to you. >> thank you, sir. better? thank you. and ranking member, thank you as well, members of the committee. we thank you for the opportunity to address the committee on this. as equally important matter to us as you said, my name is oscar munoz, i am the ceo of united airlines and with us is our preside president. >> could you pull that mike a little bit closer to you? the whole thing should move. thank you very much. >> the reason i'm sitting here today is because on april 9th,
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we had a series breach of public trust. i'd like to again apologize to dr. dao, to his family, to every person on that flight, 3411 and of course to all our customers and employees worldwide. further, i'm sory for the fact that my immediate response and the response of the airline was inadequate at the moment. no customer or individual should be treated the way mr. dao was ever. for the last three weeks i've spent every day thinking about how we got to this point. what chain of events culminates in the injury of a customer and the loss of trust of so many more. and so last week on april 27th we delivered on our promise to release an analysis about what happened, where we fell short and the actions we need to take to change the customer experience at united, as all of you have so wonderfully
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articulated. from our perspective there were four -- many failures but four main failures we outline in this report. we called on law enforcement when safety or security did not exist. that should never happen. period. second, we rebooked crew at the very last minute. we created a situation that we should have never done. third, we didn't offer enough compensation or incentivized or any options for their customers to give up a seat and therefore, perhaps, the largest failure our employees did not have the authority to do what was right or to use, frankly, their commonsense, as some of you outlined. at the moment for our customers and company we failed. and so as ceo at at the end of the day that is on me. and this has to be a turning point for the 87,000 people and professors here at united. it's my mission to make sure we make the changes needed to provide our customers with the highest level of service, and also as you said, a deeper sense
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of respect and trust and dignity. our report announced several immediate and long-term changes that will prevent an issue like this from ever happening again. second, improve the overall united experience, not just today but into the future. for example, unless safety or security is an issue we will not ask a passenger to give up their seat once they're on board or ask law enforcement to remove a customer from a flight. second, we already have taken, as we constantly do t a relook, and reevaluation of our overbooking policies. that wasn't a factor in this case, it's something we chose to reevaluate. we have reduced it. if faced with an overbook situation which will occur for many factors, we'll identify volunteers earlier when we can and more importantly offer incentives up to $10,000 because, again, commonsense says that you can't stop at a number.
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if no one is moving, you have to give them something more. more importantly, offer them options for travel on top of that. that's the combination of things we do. of course, we're not going to move our own crew, our own folks around unless scheduled 60 minutes before departure so we don't have the same situation that happened. as an added additional policy review that had nothing to do with the particular incident, we've eliminated the red tape around permanently lost bags by instituting a no question asked $1,500 reimbursement for permanently lost luggage. we'll roll out a new app on our phones that will give employees the ability to commpensate customers proactively. if we break it, it's incumbent upon us to fix it. that's the intent of the work we're doing. these changes are a start. we understand that. i also know we need to do a better job of solving problem in
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the moment. challenges often arise some within our control, some without our control. it's upon us to solve those as best as possible. when i became ceo 18 months ago, i promised we would make united the best airline, not only for our customers to fly but for employees to work w. i said it because i believe in this company, a company that's been in business since the earliest days of aviation. that's almost a century of flying. at this very moment, there are 600 to 700 united planes in the air carrying hundreds of thousands people all over the world. before the day is done we'll take off and land almost 4,500 times. by end of the year we'll carry 86 million people to 53 countries around the globe. it's become routine to be in washington today and china tomorrow. our united team along with many of us in the industry have made that extraordinary feat of moving around the world, we've made it ordinary and routine. we had a horrible failure three
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weeks ago. it is not who we are, it's not this company and it's not this industry. we have many, many successes. it's important to note that the two. we're here to discuss certain issues that won't happen again. we'll work incredibly hard to reearn not your business necessarily but your trust because that's the most important thing for our customers all around the world. more importantly as , our actio will speak longer than our words. we will do better. i thank you and scott and i look forward to answering any questions you may have. thank you sir. >> thank you, mr. munoz. >> good morning, chairman schuster. ranking member defazio. ranking member larson and members of the committee. i am senior vice president of external relations for alaska airlines. alaska airlines is the fifth largest u.s. airline. we have a work force of 19,000
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employees, 280 aircraft and 1,200 daily departures. while we have grown considerably over the last ten years, we are still small by airline standards. the four largest airlines represent 85% of the u.s. domestic capacity, while alaska is just 7%. we fill a niche role in the industry. we are an 85-year-old company, we have a low cost, low fare business model, yet offer a premium service product to our guests. we know this hearing is driven by a desire to explore u.s. airline customer service policies in light of certain recent incidents. this has been a tough few weeks for the airline industry. and the team at alaska acknowledged our colleagues at united and other airlines for their policy changes and other efforts to quickly respond to these situations. for our part, alaska is actively reviewing sensitive customer policies such as overbooking. it's our intention to further
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improve the experience for our guests. alaska's relative small size requires us to have a laser-like focus on customer service, as we compete every day for each of our guests. our stated purpose is creating an airline people love. which we view as an ongoing process of improvement. we are continuously implementing service enhancements to improve our guest's inflight experience, including the recent launching of premium class, the enhancing of in flight entertainment and upgrading our food and beverage service. however, it's the caring service our people deliver that is key to us winning guests, along with any accolades we may receive. and our formal company value of being kind hearted serves as an important guide. we have been humbled to receive recognition, including receiving
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the j.d. power award for nine years in a row as well as recently earning the number one ranking in the annual airline quality rating. while we are proud of these accomplishments, we know the strong competition we face every day from our fellow u.s. airlines requires us to constantly up our game. the airline business is not only highly competitive, but also extremely complex. this means comprehensive policies and procedures are necessarily. at alaska airlines, we also have a focus on empowering our employees to use their judgment to make exceptions to policies and procedures to insure our guests have the most positive experience possible. our smaller size gives us the ability to be somewhat nimble in this area. all of alaska's customer facing employees over 8,500 of them, have attended day and a half long training session called beyond service. which is specifically designed
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to give them the tools they need to execute on our high service standards. this training is refreshed annually and incorporated into higher training courses. in addition all our customer facing employees are given what we call an empowerment tool kit enabling them to provide additional compensation. including miles or discounts, on the spot, to resolve customer service issues. our airport customer service agents have been outfitted with mobile devices to assist customers. and our tool kit is key app on these devices. one area where sound policies and good judgment is needed is in the denied boarding environment. at alaska airlines, denied boarding events are rare. in 2016, only .4 guests per 10,000 boarded were faced with an involuntarily denied boarding a rate of .004%. while this positions us as one
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of the better performers in this area, we believe even this is too high. we're actively looking at our policy to see what we can do to bring the number down further. in a denied boarding situation we're updating our policies to make it explicit that our customer service agents are empowered to do the right thing for our guests, including having discretion over compensation so as not to adversely impact our guests. at alaska airlines we view the airline business as fundamentally a people business. if we have angry customers, no one wins. this is not to say that mistakes and anomalies do not sometimes arise and every airline is vulnerable to that, including us. but it has been our experience that such mistakes become lessons that carriers use to improve, and where, necessary, implement changes to policies and procedures. i believe this is on display with the airlines represented here today. thank you for the opportunity to
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present alaska airlines' views and i'll be pleased to answer any questions the committee may have. >> mr. jordan, you may proceed. >> good morning chairman schuster. congressman defazio and the other members of the committee. my name is bob jordan, i've had a lot of chance to work on the customer experience. southwest airlines started in 1971 serving the texas triangle, dallas, houston and austin and we've grown to be the largest domestic carrier here in the u.s. today, serving over 120 million customers a year. we have about 54,000 southwest warriors. we have an unblemished history with our records which is a 46 year record of no furloughs layoffs. we have provided profit sharing
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for our employees, which includes a $586 million profit sharing payment to our employees here in this past year. one of the basic principles of southwest airlines comes from our founder, herb, who many of you know. it's pretty simple. if you treat your employees right, they will in turn treat your customers right. it's also important to know that while this hearing is about customer service, our employees, particularly at the airports have tough jobs. it's critical not just to provide customer service, but to provide a safe and reliable operation every single day. and our -- another key principle at southwest is our purpose statement, connect people to what is important in their lives through friendly, reliable and low cost air travel. we've invested in that a lot in the last couple of years. i think made imprurchlovements.
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one of the investments is focus on training our employees on hospitality and how to be civil with each other and our customers. at the same time i appreciate the fact that our company is not perfect, and we make mistakes. there is always room for improvement. as herb likes to say, a lot of you know herb, please never rest on your laurels. if you do you'll simply get a thorn -- with the need to constantly make improvements. southwest will no longer overbook flights. that decision is the result of a bunch of factors, some of those are unique to southwest airlines. and i'll tell you what those are very quickly. first, compared to others, we have historically had a comparably high no show rate. that's really because we have very flexible policies. we allow customers to change
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their flights, cancel their flights without a fee. so you have more no shows. that no show rate has come down considerably over the years, though as we have had better improvements in technology. and then second, we made a change where we simply ask customers who are not going to travel to please call and cancel that flight before they board the aircraft. they can cancel as late as boarding and then they receive the ability just to reuse those funds without any kind of change or fee. second, we are conducting a major upgrade to our reservation system, which is the largest system that any carrier uses. and the final components go into place on may 9th. it's the most ambitious technical program we have ever used. it gives us better data and forecasting techniques so we can basically predict better who is going to show up for a flight.
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and finally, i will be honest, while we've been looking at this issue for many years, the recent events related to overbooking did cause us to stop and pause and take a look at this again. it just gave us another reason to review and another reason to go ahead and move forward with this change today. and simply put, the discontinuing the practice of overbooking is completely consistent with our other customer friendly policies like bags fly free, no change fees, no cancel fees, points that never expire. award seats on every flight every day so we think it fits perfectly with our brand. it's important to note that we will still have oversells on a very small number of flights on occasion for operational reasons. weather, you have weight and balance restrictions, we may have a down gauge of an aircraft that was 175 seats, gets down
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graded to an aircraft that's 143 seats. but we expect those to be very rare. again, we will no longer overbook as part of the selling process. most importantly, to note, i expect that our denied boardings to go down by 80% as a result of this policy change. today denied boardings are very small. they are about .01% of every passenger that flies southwest airlines is affected by denied boarding. i expect that number to go down by 80% as a result of the policy change. in conclusion, i wanted to thank you for inviting us here today. i'll be happy to take questions as well. thank you so much. >> thank you very much, mr. jordan. with that, you may proceed. >> good morning, chairman and distinguished members of the committee. i am senior vice president of customer experience at american airlines. thank you for inviting me to
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talk with you about american airlines' focus. our mission is to validate the trust placed in us by our customers, team members and other stakeholders, there is no question that travel can be stressful and disruptions will occur. when they do, we first deliver a resolution to our customers, we commit to finding the root cause and incorporate those learnings quickly. it's this process that leads to continuous improvement at american airlines. we work in a business that relies on people serving peel. with 120,000 team members who are spread around the globe, it will be difficult to avoid inconsistency and occasionally falling short. on april 21st an incident occurred on an american flight that involved one of our team member and costmer travel ing
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with small children. what happened was wrong. and we promptly apologized to the customers involved. our immediate focus was on insuring our customer and her children were cared for during the remainder of their trip. we issued a prompt public apologize and reinforced that this incident did not reflect the values of our company and team members or how we care for our customers. we removed the team member in question from service to further investigate the situation. situations like this are an o outlier. we accept that completely. incidents have been interpreted by some that customer service is brokepen in the airline agency. there's no question we can do better but we are making progress. airline customer satisfaction increased reaching an all time high and tying the record in the 2016 american customeri
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satisfaction travel report. industry ratings have improved each year since 2012. on the other side of decades of turmoil, we have been hard at work to enhance our customers' experience. and we're seeing the results of our front line team members' hard work to improve the reliability of our operation. american delivered our best ever importa performance this year for arriving on time and lowest rates of mishandled baggage. running a reliable operation is the foundation for delivering the experience that our customers deserve. today, the u.s. airline industry is stable, the safest in the world, reliable, competitive, and most importantly widely accessible. this is an intensely competitive industry, with carriers offering different prices, products and service. this competition is good for consumers.
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adjustment adjustment at the same time, we're making significant investments to improve customer experience. at american we take delivery of a new aircraft on average every four days. we're devoting $3 billion in investing to make the travel experience more comfortable and more convenient. and we have $17 billion in capital improvement projects underway at multiple airports in which we operate. this includes a new regional terminal here at washington reagan national airport so we can once and for all retire the dreaded gate 35 x. [ applause ] other events have drawn concern about customer impacts from overbooking flights. given the frequency with which travellers adjust their plans, overbooking avoids empty seats in a congested air traffic system allowing more people to fly and greater availability of lower fares. over sales situation occurs with more confirmed passengers arrive at the gate than the number of
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seats on the aircraft. 50% of oversales are driven not by overbooking but by operational and safety factors weather driven weight restrictions and accommodating federal air marshalls. american has added the following efforts, we committed we will not involuntarily remove a customer who has already boarded the aircraft to accommodate another passenger. second, we've increased the number of employees who monitor oversales and work to solicit volunteers prior to customers arriving at the airport. new procedures are showing a reduction to the previous numbers of involuntarily denied boarders as we look to bring the number closer to zero. there is now a dedicated hotline into our day of departure support desks so our agents can offer the compensation necessary. we have not established an upper limit on what we'll pay to solicit volunteers but have entrusted our team to make the
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best decisions to serve our customers. we're adding training for our team members to strengthen their abilities. this is a time of great optimism at american airlines and for air travel in our country. american is committed to validating the trust our customers, team members and stakeholders place in us. we look forward to making this engine everything it can be. i appreciate the chance to be here and pleased to answer any questions you have. >> thank you very much. and with that, mr. mcgee, you may proceed. >> good morning, chairman schuster. ranking member defazio. chairman chairman. the policy arm of consumer
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reports, thank you for the opportunity to speak today regarding the concerns of millions of american air travellers. the abusive treatment of dr. david dao last night shocked us all and exemplified that consumers are at the mercy of airlines. consumers are aware that dr. dao's fate could all too easily have been their own. this incident and other recent media reports has regalvanized congress. the major airlines may boast of investing millions into their operations, but a closer examination reveals those investments often focus on amenities and perks for the few who can afford to play more in premium classes while the overwhelming bulk of passengers in economy are subject today packed cabins, new and higher add on fees and an utter lack of respect. we hope the committee will take this opportunity to address overbooking and denied booking and take a look at the one sided contracts of carriage and gives
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all rights to airlines. dr. dao's mistreatment highlights one aspect of passenger rights that is in badly need reining in. this practice is a throw back to the 1950s when passengers could make multiple bookings without penalty. since deregulation in 1978 four key factors have emerged. one, no show passengers today are penalized. either with high fees or the forfeiture of their tickets. state of the art yield management systems allow airlines to monitor seats. interline agreements that allowed bump passengers to be accommodated on rival carriers and record high passenger lows average in the low 80s and reach 100%. we are not aware of other address in america where
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businesses are able to oversell the products. last year 40,629 passengers were bumped against their will. executive said may tell you this is a small percentage. but they were bumped without explanation based on criteria known only to the airline and missed family events, business meetings, vacations. united and other carriers announced changes to their policies. but we believe that all denied boardings should be voluntarily. the airline should pay whatever compensation is necessary to convince a passenger to willingly give up a seat for any reason. airline industry consolidation and the mega mergers of 2008 have hurt consumers. the harmful effects of this consolidation have come home to roost in numerous ways. lack of competition and consumer choice allows carriers to disregard the interests and concerns of their passengers in ways that would have been
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unthinkable when there were 12 or 10 or 8 major airlines in the united states. passenger protections are further compromised because the airline deregulation act p preempted state laws. it was meant to keep states from imposing economic regulation. court cited the preemption cause in striking down new york state's 2007 airline passenger bill of rights. it's also become more difficult for consumers to determine the true cost of flying. basic services such as checking baggage, selecting seats, changing flight reservations, even carrying on a small bag in some cases are subject to higher and higher fees. it's no longer possible to make accurate apples to apples comparisons. we are calling for a consistent uniform comprehensive clearly written set of rules. what we cannot do is continue to leave it to the airlines to
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decide what rights they will confer in their contracts of carriage. which is consumer reports has documented over the years, are lengthy, filled with legal jargon, and where the priority is to protect the airline not its passengers and is subject to change whenever it suits the airline. here's an example taken from delta's contract of carriage. quote, delta's published schedules are not guaranteed and form no part of the contract. delta may change seat assignments and alter or omit stopping places. schedules are subject to change without notice. here are some of the passenger protections we endorse. clear and consistent gliduideli. for compensation for flight cancellations, clear and consistent guidelines for mishandled baggage. clear and consistent guidelines for compensation for voluntary relinkishment of a ticketed seat and a prohibition on
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involuntarily relinquishment. online and offline, whether offered directly by the airlines themselves. enforcement of minimum seat standards. address health concerns, including the risk of deep vein thrombosis. much has happened in the. especially enhanced competition and improved customer experience have not been realized. these disturbing incidents of passenger mistreatment have made clear we need to start a conversation immediately. i'll be happy to answer any questions you may have. thank you very much. >> members will have five minutes to ask questions and we'll stay pretty close to --
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we'll stay very close to the five minute timeframe on the questions. i'd ask all members to respect that. i'll begin by questioning yootruly believe that w45u7d over the past couple of incidents was -- deals with empowering the employees. and look at everything through the prism of 20 years in business myself. many times situations would occur, my employees hopefully with the proper training, proper policies in place they'd make the right decisions. we always stood by those decisions and making sure that the customer was taken first was always paramount. and as i said, i believe that to empower your employees you have to have clear policies in place so they understand what is expected. they have to be trained so they can develop the judgment. i'm interested in hearing from mr. munoz, two situations that
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occurred most recently what are you doing to make sure your employees are empowered, specifically? mr. munoz, why don't you start? >> sure. our curriculum for customer service and training and dealing with the de-escalation issues is something we have to strengthen. i think we do it when you're first hired but we don't do it on a recurring basis. there is lots fto learn from th other folks at this table. the empowerment angle, is beyond the empowerment at the point of a situation that we were faced yet on april 9th i think it's incumbent to put us policies in place that prohibit us from getting into a situation like that. it's important when you put folks in that kind of state. no rules, no empowerment no training can deal with that.
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it's important to go back in the chain, which is the policies we've implemented to say we're not going to deboard someone if they've already been sat. we are going to reduce overbooking, although that wasn't a factor in this particular case. there is training and curriculum, we'll do that and learn from others at this table. most importantly, it's important to, you know -- the start of the chain, you know, it's not create these impossible situations for people that there is no out. >> yes, i would agree with mr. munoz. we know that it's the responsibility of airline leadership to make sure that our employees have the proper tools, training, resource and support to deliver the kind of customer service that they're so good at doing and they want to do every day. we recently launched a service training initiative for front line team members called elevate the every day experience. it's a two day program. by this summer, over 40,000 of our team members will have completed the cross functional experience learning course.
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we're very excited about. in light of recent events and also based on feedback from our employees, we're working to enhance that curriculum to further support our employees with training on de-escalating complicated situations. and to provide kind of interim training between those sessions as well. so we're looking forward to that and, again, want to make sure our employees have the support and tools they need. >> thank you. second question on overbooking. basically i understand the overbooking situation. but i know there's refundable and non-refundable tickets. and it's been my experience in business if somebody buys a product they pay for it, they get it. can you explain to me the difference how refundable and non-refundable customers are treated when it comes to not putting them on a flight? refunding their dollars, those kinds of things, mr. munoz if you would. >> there is many practices and
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procedure. mr. kirby has been in the industry for 20 years and i thought this committee deserved a more exacting knowledge base. if i could -- >> sure, absolutely. >> thank you, chairman schuster. as we've talked about, this incident was not driven -- the incident on united was not driven by overbooking. overbooking is much in the news about this. it's important to understand that most of our oversale situations are driven by operational restrictions. the largest being weight restrictions because of weather. so for example, when you're at an airport and there's snow or ice, or even wind and weather, at a departuchero arrival, we'r not able to take our normal load. sometimes we have to deplane 20 to 30 people. that's the vast majority of our oversale situations.
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m as for overbooking we use it to accommodate thousands of customers. we had an incident in mumbai where an airplane went out of service on landing and we had to replace the engine which takes a while in india. we had to cancel the return flight. we accommodated a couple hundred customers on other lines but we had customers still to deal with. we overbooked the next day's flights. we were able to accommodate 25 customers the other way and the other 23 were able to voluntarily give them compensation to take a flight the next day. it's an example where overbooking actually helped us to take care of customers. at united the vast majority of involuntarily bookings are driven by these situations. we view overbooking particularly
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where we can incentivize a customer to take an alternative flight. 96% of the situations where we have overbooking we're able to get the customers to be volunteers. in today's world we've increased the compensation limit to $10,000. we view overbooking as something that actually helps us accommodate and take care of thousands more customers than we would otherwise be able to. >> thank you, mr. kirby. i have exceeded my time. i'll stay on message with the five minutes. i wish you could in writing respond to me with the refundable and non-refundable. >> thank you, mr. chairman. to united, american and alaska, how much does it cost you to change someone's booking? give me a number, you're charging people $200, $300 to
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change a flight. it's inefficient if it costs that much. >> the cost is not about the changing of the ticket. i don't know what the actual -- >> it's about being profitable. i observe united got $800 million in change fees. $800 million. that's a lot of money. and there's no real cost? i mean, i realize -- let's go back -- first, how about can you answer, southwest, does not do this. can american answer, how much does it cost to change someone's ticket? >> i would agree -- >> operational concerns so you can get the planes absolutely full or sell more than 100% of the seats. okay. let's go to overbooking. on overbooking, southwest -- are you going to go broke or something? you're not going to overbook
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anymore, how can you do that? >> we're not going to go broke. what happened, it's basic, our -- there are a couple reasons that cause you the need to overbook. we have no shows. no shows at southwest have come down materially over the years as we've had better technology. we actually have more no shows than most because we have flexible rules, no change fees so those have come down. and second we improved our technology to really understand who is going to show at the aircraft. third, we did implement a pretty modest change which -- >> i've only got five minutes. i get it. mr. mcgee do you want to comment? you said it was 1950s, because in those days you didn't get -- you weren't making $800 million on change fees. >> exactly. at that time, it was a burden for airlines because business travellers in particular used to book five flights at once and get one of them. then those seats went empty.
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for all the reasons i detailed which i don't want to repeat for time's sake it's clear that that time has past. all of the language in the contracts favor the airlines here. if you're delayed getting to the airport because your taxi driver had an accident and you have a non-refundable ticket, you're out. regardless. there's no provision in the contract that accommodates for your circumstances. but yet there's a long list of accommodations for circumstances for the airline or what they term acts of god, which in some cases are in fact not acts of god. >> right. okay, thank you. so back to mr. kirby, you said that, you know, you talked about how you can use overbooking to help people. how about just a policy that in routine reservations you would never ever overbook. you would never sell more than 100% of the seats for routine day-to-day booking, not to accommodate people because of a change of plane or something
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else. just on day-to-day basis. >> sir -- >> southwest is doing that. >> sir, we still think that helps us accommodate -- >> but it also helps you get to these load factors and then, of course, you have your change fees. let's go to contracts of carriage. how about a simple disclosure. i mean, this is united's contract of carriage. this is just for fares. if you look at the print here, you know, very user friendly online. supposed to read this before you buy your ticket. so how about a -- you know, distilled down simple language disclosure, would any of the airlines agree to do that, post that, make it available to people? >> we would acknowledge ours is too long. we recently acquired virgin america, they're more efficient. >> there's a 20 pages, your was
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67. united, was 37,000 words, with smaller print on only 46 pages. i don't think that counts because it doesn't make it user friendly. one other question, you know, as we observed, there's a lot of tension on the planes you're jamming more people in. is there a question about how many flight attendants there should be on planes as opposed to the faa requirement? because they're being asked essentially to referee and do all sorts of things. we have terrorism. everything has changed but the number of flight attendants hasn't changed as required by the faa per passenger for 20 years or so. anybody think that maybe we're overstressing the flight attendants? mr. mcgee, do you want to answer? >> yes. there's been a lot of talk about employee and the term has been used multiple times. i think an important point here is that this is an industry that has massively out sourced so
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many functions including functions that interface with the public. i'm not sure that many passengers are aware that when they check in or speaking to a customer service agent -- in many cases they're wearing a uniform from an airline but they're out sourced. what this means for passengers, is that in no way are we denigrating the work of the people looking for jobs, but the fact is, they're poorly trained. it's a transient work force and the airlines have outsourced just about everything the faa will allow in outsourcing. we're not here to do to talk about aircraft maintenance, but that's one area that affects safety. >> thank you. mr. duncan. >> just yesterday morning at the knoxville airport the plane we were supposed to fly on to washington, a wing clipped a baggage truck with damage you couldn't even notice but we spent three and a half hours there. they had trouble getting ahold
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of the proper person, the manufacturer is in brazil. then they canceled the plane. and it caused me to miss votes last night and i hate to miss votes. but i tell you this just to tell you that i've flown so much over the years that i've run into just about every problem you can think of. we have the best aviation system in the entire world. my dad told me, everything looks easy from a distance. but you have a very tough business. but the i think what happens when people have 99 good flights and one bad one, the one they tell everybody about is the one bad one. i am so thankful -- i heard on npr many years ago that the russian system sometimes had delayed as long as four days. i mean, we get upset with a 40 minute delay. so i appreciate what you do for us. let me ask you this, mr. munoz, before this unfortunate incident with dr. dao, did your airline
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ever call law enforcement to remove someone due to overbooking before that incident? >> there had been a good amount of occasions where that has happened. it happened without incident. >> where you had to call law enforcement due to overbooking? >> we call law enforcement for safety and security reasons when they happen. there have been occurrences in the past in this year where we've had to ask law enforcement to come in and help and assist. >> have any of you other airlines had law enforcement remove people due to overbooking? have you ever done that that you know of, mr. jordan? >> no, sir, not that i know of. again, i agree with oscar, it's primarily in the cases of just safety and security where you have potentially an intoxicated passenger -- >> i mean, if it's disruptive person with law enforcement, that's a different situation. >> yes, sir. but in the case of a -- >> due to overbooking.
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>> not that i know of, sir. >> we were given statistics, there is something called airline quality rating, it said that there is removed six -- that involuntarily denied bookings, boardings affected six passenger per 100,000. and i notice that mr. mcgee's testimony he said that it was 40,000 or a little over 40,000 out of the almost 700 million passengers that comes to one for every 17,500 roughly. it seems to me that's a pretty low -- pretty impressive figure. we also were submitted information from another airline that's not here that said that overbooking has been done so that as one of the many ways that ticket prices are held
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lower. is that correct? >> yes, congressman duncan that's correct. in fact for alaska airlines in 2016 alone, there were 675,000 seats that would not have been available if we did not have an overbooking policy. so those are seats that would not have been available for last minute business travel purchases for accommodating guests that might have been disrupted due to weather or downsized aircraft. and, frankly, having those additional seats available for sale allows us to keep fares low. >> so more people are able to fly at lower prices because of overbooking? >> yes, sir. >> is that true, would you agree with that mr. kirby? >> yes, sir. >> all right. all right. thank you very much. >> with that, ms. norton is recognized for five minutes. >> thank you very much, mr. chairman. i know you must have received messages from a number of us.
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after the first incident about the need for more oversight by this committee of the customer service part of what the airlines do for us as a nation. i want to say to uour witnesses you may think you're looking at members of congress, but really you're looking at your customer base. except for a few of us, perhaps me chiefly among them because i represent the people who live in the nation's capital, most members of congress get on an airplane every single week, frequent flyers who do weekly monitoring, i can't imagine why we haven't had a hearing like this based on what my colleagues have -- go through. now, when it comes to business in the united states, i expect and have seen competition solve most of our problems. but essentially, you represent four regional monopolies.
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so you've been ail to do anything you want to do. add on fees, basic services that we take for granted, it's as if you have to tip a corporation to get a business to do what they used to do for free as a courtesy. so over time, we do have such hearings as this and people come up with notions when we ought to have a passenger bill of rights or whatever. mr. defazio, our ranking member, an 87 no less entered a document that didn't pass. but the u.s. transportation secretary, because this could be done by the administrative process as well indeed was successful in getting through that process. rules having to do, for example, with lost baggage.
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so what we have here essentially are passengers' bill of rights. each of you have a contract, we've learned that, you know, you can find out what it is if you go on the website. or if you -- you can look at the tens and tens of pages. i want to clarify, whether i believe was the response to mr. defazio, are each of the airlines here willing to boil down what the customer is entitled to to a one pager that the passenger could receive as part of getting on the flight or could find by going to the website? could i have answers from each of the airlines? i only have five minutes. speak up first, mr. munoz, why point to him, why not begin with you? >> it's an excellent question. i don't know that i have the proper answer with regards to a
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one page document. i think simplification -- >> mr. kirby do you think that that could happen? >> ma'am, i'm not sure if we could get it to one page. but i certainly think getting a simpler contract -- >> anybody else have people who can write who can boil this down to one page? >> that would be our goal, ma'am. >> sir? >> that would be our goal, ma'am. >> congresswoman, absolutely we would love to continue to consolidate that. i will tell you we also have a customer service commitment document which writes it in sumpler language. we have that on our website which describes what southwest airlines does. the goal is to be completely transparent with a customer about what is available to them in any case. >> we at american have been working to simplify our policies to make them clear on our website and we would like to strive for a more suimplified
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contract of carriage. >> we're going to hold you accountable for that and see who is best at doing something that you may have learned to do in college, if you had good writing instruction. mr. jordan, do i understand that southwest airlines -- this is my favorite way to do things in our country -- has found that using incentives, you can indeed, solve problems that are otherwise solved by remedies such as overbooking? you're incentivizing approach, where you say you brought down the number of involuntarily boarding of -- involuntaries where boarding does not occur. >> yes, ma'am, our goal with this change in not overbooking is part of the selling -- >> what was the incentive that was most important? >> to elimtating the problem fo our customers. >> so you did not have to overbook to the customer so you
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didn't have to overbook. >> actually, it's on the airlines we've had better technology that allows us to el eliminate the process. the value to the airline has gone down very, very much. but it would be our incentive. we make sure our employees are empowered to do what is right for our customers in the moment so that we don't have incidents that we shouldn't. >> thank you, gentlemen. i would point out, i think these contracts of carriage are far too complicated. and simplifying would be wonderful. every member on this committee should look at each other and say part of the problem is us. part of the problem is the overabundance of attorneys in this country that are sue happy. so a little bit of tort reform may be able to let the industry,
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not just this industry, but every industry to simplify what they put out there in contrast. again, i'm not going to get into it right now. i'm pretty sure it's drirveven lawsuits in this country. congress has to make sure we're simplifying the laws so we can get one page, two page, ten page documents on these contracts of carriage. i recognize mr. crawford. >> you probably felt the eyes of a lot of attorneys on you at that point in time. mr. mcgee, you touched on this in your testimony, deregulation back in 1978. i'm a limited government guy. i don't want the government to get involved to solve problems in a competitive marketplace. do you or any members on the panel, do you believe congress should reregulate the airline industry? >> consumers union supported deregulation in 1978, long before my time. i was in high school at the time. but we have at no time in the 17
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years i've been with consumers union recommended reregulation. what we have said is that it's clear that when you leave customer service up to the airlines on many issues over the years, tarmac delays and other things, they do not do what's best for their airlines -- for their customers. and in answer to the congresswoman pf congresswoman's question. it's possible to an extent because the model exists in the european union. for 12 years there have been rights easy to read, one page on the e.u.'s website. >> let's let some of the other members weigh in in the limited time we have. >> we work in a competitive industry we know that customer service is essential to retaining our customers. that's our incentive to do better and we will. the d.o.t. exercises broad oversight and regulating airline and protecting consumers as well. >> mr. jordan? >> while we're talking about
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very difficult issues today, generally, the performance of the industry has been very good on southwest sake, our promoter scores are 11 points better than the last two years. our otp is up seven points -- >> that's a no on -- >> in our history, no, no, sir. >> no, sir, i've been with alaska airlines for 17 years, in that entire time we've been competing hard against the rest of the folks against the panel here. and that competition has been our main motivation to improve customer service. >> agree with most of us, the answer with us would be no. by contrast is having worked in heavily regulated industry in telecom and other transportation models in the railroad space and having a chance to see this over the last year, i think there's a delicate balance between the right things as mr. -- >> that's right. what we've heard today demonstrates kind of the line we're walking here. i don't want to jump into a
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competitive model and apply reregulation. but that means that the industry has to do some self-regulation to demonstrate that you don't need interference from congress. >> i couldn't agree more. it's shameful like the event we had at united has to drive this conversation. it will accelerate at least from united's perspective, this will make us better. >> let me ask you something, this was mr. defazio touched on this this. i could see virtually everybody in their chairs was uncomfortable. this is not a topic anybody wants to talk about. the change fees. and there's a relationship to overbooking and change fees, is there not? >> yes, sir we have change fees. and they're mostly about our way of offering low fares to consumers. >> sure. >> and they're about keeping our fares low. and as was referenced earlier today, fares have declined 24%
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in the last 20 years. one of the great things about deregulation and these policies, overbooking and change fees, is we've driven prices lower and there's more people traveling in the united states than anywhere in the world. >> ma'am, i could tell you had some things you want toded to a >> thank you, sir. we strive to offer different fare products to meet the needs of varying consumers. and so some customers will value flexibility and be willing to pay more for an unrestricted ticket. while others really just want the lowest fare that's why we sell a non-refundable product. even though customers have agreed to a non-refundable product the change fee is allow some flexibility if the circumstances arise that they didn't anticipate. >> this gets back to what we talked about with full disclosure on what you can expect as a customer. all of you are competing. i love a competitive model because customer service
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generally thrives in a competitive environment. we're not seeing that today with consolidation. we've seen a decline in the level of customer service that's relate today the amount of consolidation that's taken place in the last 15 years. that's probably an experience we all had at some point in time in our air travels. is that fair? >> i'll take it initially i've experienced a lot of consolidation in my experiences. and the customer has an infinite amount greater choice today than we've had in a long period of time. and scott, who has been in this industry for 20 years has been part of many integrations and consolidations that could share insights. >> my time is expired but i appreciate your comments. i yield back. >> mr. johnson is recognized for five minutes. >> thank you very much, mr. chairman. let me ask, i guess in general,
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but most especially for united, first of all, it's clear that we have so much air traffic. and the incidents on april 9th involving the forcible removal of a passenger on board a united flight 3411 has brought into question how airlines treat its passengers. this really is not a new issue. in 2016, the department of transportation received 12,766 consumer complaints against u.s. airlines. so it's impossible to say how many of these are legitimate, illegitimate, how many of the incidents wasn't reported. burt i guess what i need to ask first, is what were the rules in place to determine who would be removed from the plane? >> thank you. ma'am, it was a simple automatic
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process that dealt without all the complexity what someone played and whether they were enrolled in our mileage plus program. it's a difficult choice when we get to that point. this situation ever from happening. because it is an impossible situation. how do you pick amongst all of you as to who sits where. we have a process for where you sit, and we have a process. specifically, the policy was around a fare that you pay and whether you're -- what level you were. >> so this day was cheaper than the rest. >> it was one of the lower fares, yes. >> what about -- what about the rest of it? is that the way those who are traveling are mistreated? >> no, congresswoman, our selection criteria is tied as 0 whether or not a customer had a seat assignment.
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if there were multiple customer to have a seat assignment. it would be the last customer to check in on the flight. >> congresswoman, same thing here. basically the last person who arrived at the gate. our goal is to always not have any involuntary. but to treat all of those folks as voluntary boarding, if we have to, deal with that before boarding but basically it's the check-in date. >> so, when someone checks in, and is given a seat and someone checks in later who paid more for a seat, they can unseat the person who is seated? >> no, ma'am, in the case, again of southwest, if the aircraft has 143 seats, for example. and the 144th person, the overbooked checks in. they do not have a seat.
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so they would be the first person we would attempt to work with to voluntary deny board them through compensation. >> but i understand this person was seated. had been admitted by ticket and was seated in a seat. and the person who they were trying to get on did not have to purchase a seat. how how do you make that criteria? >> it was -- it was a mistake of epic proportions, in hindsight, clearly, our policies broke down in that regard. the situation specifically was that a crew member, trying to get to another flight, in essence, ironically, in a customer-service oriented fashion. to try to make sure that crew arrived at the next aircraft so 150 people could get to their destinations. it's horrible calculus to put people in. do you make the flight for 150 or do you seriously inconvenience two or three on a
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current flight. so one of the policy changes we introduced last week is that once you sit on our aircraft and you are in a seat, other than for safety or security reasons, we will not take you off that flight. >> i understand there were four seats needed. three had been given. if that one person had not arrived at the next spot, would that have stopped that airline from taking off? >> yes, ma'am. there's a certain level of in-flight and flight ops crews we have to have an aircraft and it would not have left. and we did try to find alternative aspects with regards to getting a different flight crew in there. this is a fair well orchestrated across the word to get 700 flights in the air at any given moment. so flight crews are not readily available in all locations. so, we did try to look at that process. >> so, you have two groups of rules to look at. did you address the rule what happens if a person -- i'm
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sorry, my time is out. let me just finish my question to think about it. if that person had not got ton the next flight that you were trying to get there, what is the alternative if that person couldn't get there? would three already -- >> we have a policy, i'll be happy to follow up with you. >> thank you the gentlelady. we recognize mr. hunter for five minutes for questions. >> thank you, mr. chairman. first, to all of, thank you tour bei for being here. i fly from san diego, i've got one of the longest flights. i fly back and forth because i have kids. i guess one of questions is why do you hate the american people? but i'm not going to ask that. what i have heard you talk a lot about is competition, explain that to me. because i think that's a joke. it's an absolute joke that there's competition within the airline industry, if you just look at san diego, it's united airlines, i have no other
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options unless i want to fly to san francisco, l.a. or chicago. there's only one straight shot to another united-owned hub, dulles airport. that's it. any of you, please, explain the competition for a layman like me that must not understand it very well. competition really quick jack in the box, mcdonald's, wendy's, that's competition. hertz, budget, avis, that's competition. having one airline that flies one straight shot out of the airlines, that's not competition. please explain it to me. >> congressman, speaking for southwest airlines, i can assure you that the competition level which we're experiencing right now which is defined basically in a couple of ways, how many of our routes are overlapped where we have competition. briefly, we look at where we're overlapped by the ultra low-cost carriers. the frontiers, the spirits. it's never been higher. and climbing at a higher rate than ever before.
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so, we have never had more competition in our history. and our best measure is possible fares, because fares are ultimately tied. they're down in the first quarter. 3% from '15. the average fare is $152 which inflation adjusted was below a decade ago. >> you wouldn't describe competition as options? >> again, i would describe it as where we are overlapped with other carriers. where we do have competition. of course, you're going to have routes where there are very few options. and you're going to have routes where there are many, many options, it differs by route. >> sblet me interrupt real quic mr. munoz, what amount are -- >> 60% to 70%. and six other hubs.
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>> miss filipovic, same question for you for the dallas hub? >> one thing for the purpose of hubs is to build factories that can manufacture connections. more than half of customers flying in and out of our hubs, in some cases like our charlotte hub. 70% of our customers are connecting there. it's not just about yours and a destination market because there are lots of different ways that we build routes. >> would any of you concede in some airports there are not hubs except for one of you, would you not concede that in a small way? >> i think from a common sense perspective, absolutely. and it does occur. the concept of competition, again, a different perspective in other industries. when you think at when i used to work at both pepsi and coke. that seems to work okay. i used to work in the telecom,
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space, between at&t and verizon. you have that, a lot of product offerings, and a lot of additional things and continued competition. i heard scott talk a little bit about the dynamic inside this industry. >> representative. >> by the way, this is different than any other thing because we don't have any a choice. i have for fly. the american people have to fly all the time. we don't have a choice. you have a choice not to buy a pepsi, you have a choice not to go with verizon or go with t-mobile or sprint. that is highly regulated, telecommunications. more so than you all. there's no option not to fly. there's a big difference there. >> yes, sir, i would say this is a highly, highly competitive industry, you can see it in the fares and product offerings. there are markets that are
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nonsectarian. there are customers flying in markets where there either is nonstop work competition or carrier customers. half of our customers are flying in connecting markets which obviously have less competition. even in those markets like dulles or san diego, more than half the people that fly between washington, d.c. and san diego choose to make a connection. so they're choosing to take a connection on someone other than united airlines. even though we're the only nonstop carrier in that market. in a market like washington, dulles or san diego. there's nothing to prevent another airline from coming in and flying in that market. so it's a hul competitive market. there are instances where are it's unusual where there's only a single carrier in the market. but it's still a hugely competitive market and there almost always are connecting alternatives for customers. >> i would quickly add to, again, it's a route-by-route thing. you can find exceptions but the vast majority of routes have a great deal of competition on them. >> thank you, gentlemen. we anticipate this could be a long hearing so we're going to
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take periodic breaks. this is our first five-minute break. this son-in-law for the witnesses and member. those in the audience can go after the break. adam, start the clock. five minutes.
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brief break. a five-minute break in this house transportation committee hearing on airline customer service. and a reminder, with most of our
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hearings, if you miss any of it you can go to the c-span video library and do a search in the video library search bar. in this particular case you would type house transportation committee to find it and you can watch it in its entirety. also, we will reair the entire hearing tonight on the c-span network. it will resume in a couple of moments. just to let you know the house rules committee will be meeting this afternoon to mark up the $1.1 trillion spending bill due over the weekend. scheduled to come to the floor later this week. we will have live coverage starting at 3:00 p.m. eastern here on c-span3. a couple of tweets to pass on to you very quickly. president trump tweeted this morning about the agreements -- the federal budget agreement. he tweeted the reason for the plan negotiated between republicans and democrats is that we need 60 votes in the senate which are not there. we either elect more republican senators in 2018. or change the rule to 51%.
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the country needs a good shutdown to fix the mess. everybody get settled in, thank you very much. i now recognize mr. larson for five minutes. >> thank you, mr. chairman. mr. munoz, i'm not quite satisfied with the answer you gave to mr. duncan earlier so i want to explore it. the question asked of you is whether you believe united law enforcement at all for remove a person from overbooking and you talked about safety and security twice in response to the question. so it seemed to either be a pat answer. or i don't -- so, let me be specific. has united this year removed anyone using security personnel, strictly on an overbooking issue? >> i am not air what of any
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specific instance that a law enforcement person has removed someone for that particular oversold situation. >> that's clear. can i ask you -- are you able to tell us what united management or the site manager communicated to law enforcement that day regarding the customer on united 3411? was this person -- did they say this person is disruptive and needs to be removed? or did they say this person won't take $800 and needs to be removed gentleman. >> it wasn't nearly as specifics that. the failed procedure that we have is after the attempts to incenter that vise a customer with that amount and other amounts, the protocol, the policy called for asking for assistance from local law enforcement. and that's wrong. >> until -- what changes have you made -- what change have you made in your policies with regards to that? >> well, first of all, the $800 is going to go up to $10,000.
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offering alternative solutions to fly. it's not just about money for some folks. we have kids on that flight. how do i get to my destination? of course, what we did, we will no longer have law enforcement deboard anyone that's already been boarded on our aircraft. >> thanks. >> part of the concerns we have, sometimes, we're guilty of this too. we'll say this. you made your problem the customer's problem. and in this particular case. so, i think hearing from you all, how you're not making the problems you have about, you know, getting your staff somewhere and making a customer's -- putting the solution on the customer, to solve your problem while getting staff somewhere is important. and that goes, i think, for everybody. >> i couldn't agree with you more. absolutely. which is why our crew members, unless they check in 60 minutes before check-in, they will not be allowed to do what actually triggered this whole event. i absolutely agree with you.
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>> mr. jordan, you can help me understand what we can expect to see from southwest on may 8th or may 9th, with regard to one -- the upgrade, with regard to one res, in the last year, we had the meltdown on your i.t. system that maybe not as directly the subject of this particular hearing? certainly, didn't trigger this hearing. but it's certainly a customer service issue. so what's going to happen with the rollout that's going to make it -- i think you called it bigger and better than what you have now? >> yes, sir. it's the largest technology project we have ever undertaken. we have derisked it in that we've been putting in pieces for literally almost a year now to ensure that they work as they go. there's an extensive testing we put in hundreds and hundreds of thousands of hours of training. we'll have hundreds and hundreds of employees.
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and therefore, it's on the day of limit achation that have com. the testing has gone flawless. like any software implementation, i expect problems on may 9th when we implement. but i think we're extremely well prepared. and i expect it to all go very well. >> and found small problems in the industry when it comes to i.t. result in delays to an entire system. so what -- so, even saying small problems doesn't give me ate l of assurance. you can give me more assurance? >> again, we've tested this product more than any i.t. implementation we've ever done. we've implemented those pieces in phases so that we're not doing -- usually what happens with an airline. you put in something in a big bang implementation overnight, it doesn't work very well and you wake up the next morning.
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that's usually what will goes wrong. we've implemented small pieces almost every week for literally almost a year now. secondly, when we began to enter international destinations they've actually been running on a new system and have been for a year. so we've been running in production in a small way for a long period of time. and -- >> that's good. one more question for united airlines. if you guys can get back to us and explain to us why this particular issue on april 9th was not an overbooking issue. you keep saying it wasn't an overbooking issue. the customer and every customer, everybody who watched online saw it as an overbooking issue. >> happy to get back to you on that. >> thank you, gentlemen. five minutes. >> thank you very much, chairman shuster, and much like mr. hunter, i'm a pretty frequent flier on a week status on every airline up there except for alaska and that's because you just don't fly to corpus
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christi, texas. but what i'm seeing is a growing level of frustration, both from the passengers and from your passenger facing crew in the airport. we've had to tedeal with the ts. we got to buy liquid because you can't take it on. you got to buy food. you're stuck buying $12 for a tv dinner or $7 for a lunch on the airplane. passengers are frustrated with it. another piece is we're all rushing to get what limited bin space. several years ago, the airlines said fuel costs are up so we're going to start charging for checked bags to make up that revenue. now the fuel costs are down. are there any plans to remove the checked baggage fees, mr. munoz and miss philipovitch? >> can scott answer that.
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>> i thank you, mr. congressman. we do the check bags like we keep the other fares low. at united states, we spend about $1.9 billion carrying checked bags. >> answer is no. what about american? >> same, we put our fees in place to give customers more options and more choices and to pay for adjusted services that they intend to consume. >> so, let's talk about southwest. no check bag fees. mr. kirby, you said you had to overbook flights to keep flights low. i can't remember the last time the united states fare was lower than a southwest fare. how are you able to do it at southwest? >> just a couple things. and we appreciate your business in corpus christi, by the way. we try to make policies that just make sense for the customer. we like you're going to travel it makes sense that you can bring your clothes along with you. and so, specifically, regarding the overhead bins, the no check
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bag fees allow people to check their bags. so we actually have more bin space because they're checking the bags. and again, we strive to keep costs low. it's always been a tenant of our airline business, all the way back. and keeping costs low like having no bag fee. finally, we believe we get more business overall because we do not charge fees. >> mr. munoz, if the very much publicized incident that probably lent to this hearing, the reason you were trying to get people off, you were trying to move a crew to get to another airline. united is my primary carrier. one of the things i get when i get delayed it comes up on my app saying awaiting inbound crew. what i don't understand, why don't you just keep the crew with the airplane? why dot crews have to connect? why can't we put the same crew with the same airline and take
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that one issue offer the tab th? >> i think it's a great thought. but there are rules and safety implications of making sure people get rest. so the ability to keep crews on the same flight for an extended period of time is just not something that's easily doable. >> all right. and then i have one other question for mrs. philipovitch about american. we're seeing report information the media about your new uniform having adverse reactions with over 3,000 flight attendants and now with pilots. my concern is not only with the safety of the crew. but alsoful there are toxic fumes or something that's released as a result of circulating air or the heat on the airplane, there's a potential risk for passengers. what is your airline doing to address the uniform issue? and if you're not in a position to answer that, can you get somebody who can to give me the info? >> no i'm happy to give you info, information. first, i just want to make sure
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to state that the safety and comfort of both our customers and our employees is absolutely our top priority. we launched a new uniform last fall. and for about 75,000 of our team members. and the vast majority of them really liked the product that we launched. and two members were involved in developing it as well. shortly after launch, we did start get something reports some of our employees were experiencing some reaction to the uniform, despite the fact that we put it through a couple rounds of testing to ensure that itted mes and exceeds industry standards. we've been working with those team members to make sure that they have alternative uniforms that they can wear. both different fabrics from the initial manufacturer of our program. and also recently, we just announced an additional manufacturer that can provide uniforms for our employees. so, we'll continue to work with team members it's an issue we're taking very seriously and we're putting emphasis on it. >> i hear the tapping. >> thank you, gentlemen.
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i also point out, sometimes, we put these rules and laws into place that these situations occur because the airlines are living with them. and it's not just the airlines. it's industries across america. so, we've got to pay close attention to what we do in response to an industry. with that i recognize mr. capuano. >> thank you, mr. chairman. thank you for being here. here's the problem. is that the flying experience, and again, we all do it on a regular basis, the flying experience is like everything else in life. the truth is, my flying experience is reasonable. 90% of the time. but it has a lot to do with lowered expectations. when i was a kid, i grew up in a neighborhood that every single playground was full of grobroke glass, broken basketball hoops and no swings and everybody just accepted it because that's the way it was. well, it's not like thanymore. it took us 20 years to change
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that attitude because the people that i grew up would nevaccept t because the expectations have risen. the problem with the flying experience is across the board. we all know it's a terrible experience. starting from the minute i go on the computer to try to figure out which flight i want to take. i have to go to several different websites. and even when i do that, i have to go into the depth of the website to get truly comparable prices. because some don't charge fees. some do fees. some charge fees for baggage. some charge fees for oxygen. who knows. i can't get comparable prices. so before i buy the ticket, i'm frustrated. i personally have shut that computer down repeatedly for many years, because i have to go back -- you're right, i got to fly. and you got to go back and you got to dig your way through it. from the very start, but we all
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expect it to be a miserable experience. then when you get to the airport. you have to get through the tsa line which now, being a regular flyer, i go through the express line. but now the express lines are full. of people that don't know to take their keys out of their pocket. frustrated. then i get to the gate. plane's late. plane's not late. never explained why. now, honestly, up until last week, bumping was not a problem. i've been bumped on occasion but it's been handled reasonably. by the way, mr. munoz, i want to know how to get that $10,000 thing, because believe me, i'll be flying united a lot more, you can figure that out. here's the problem, and even with these fees, it's interesting, i get the airlines coming in explaining about the facilities we have. yet i see in the latest year, 2015, $3.3 billion in fees which
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don't pay the ticket tax which means almost $300 million that could have been put into improving those facilities didn't. because you don't want to tell us what your tickets cost. it's all, to me -- we're kind of sick of it. as consuming americans. we've got to fly. you've got us. you've got us. and if you want to keep treating us this way. fine. i guess we can only do so much. but there will come a day when congress won't accept it anymore. on behalf of the american people. and that shouldn't happen. mr. munoz, you had a particular problem last week. i accept your apology. i think it's genuine, i think you mean it. but here's the problem. the apology is the beginning and the policies seem reasonable. the ones you have now. i don't mean to pick on you, but, you know, it's your turn. the problem is, every year, i say, you know what, i'm going to the gym. i'm going to lose five pounds. i'm going to get in shape again.
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by february, i'm kind of out of it. ahh, i give up on it. every person i know that ever committed a crime has basically apologized for it. didn't mean to. and the apology is good. i'm not saying -- and again, i do accept it. i hope and believe it's sincere today. but i hope you all know that this doesn't stop today. and you will be judged on how it is implemented. and it's not just you, mr. munoz. again it happened to be you today. but it could be any one of you tomorrow. i presume you've all rechecked your own rules and regulations about how you do it. seeing i'm sure you don't want to be in the hot seat the next time. so, the truth is, i don't really have any questions because, again, i do think you've addressed the immediate situation. but if you walked out of here thinking that the immediate situation is the only problem the american public has with the flying experience, you would have missed the point. we have a problem. that shouldn't be as bad and as
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the unpleasant as it is. and you're the only people that can fix it. and i encourage you to do so. so that we can get back to the point of nobody is against you making money. i don't want to yell at you. i just want to be able to go to the airport and gate from point "a" to point "b" with a more pleasant experience. if i do believe me, i'll go back to your airlines more often when that happens. mr. chairman, i apologize for not having a question but i think all the questions i have have been answered. >> the response to that is well said. thank you. with that i yield to mr. gibbs. >> thank you, mr. chairman. you know, i was thinking about this, we really have a cultural problem for this to happen on united with the doctor. it's unbelievable to me that the pilot or crew or anybody would let that happen when you have a person on there forcibly removed that's not a security risk or whatever. so, i'm glad to see that united's putting in the policy
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of compensation. and that's why i think we solve the problem. i think the overbooking that we referred to today has some positives and i think one big positive helps keep fares down for everybody. but when overbooking does happen. we ought to let the market forces work. i think the $10,000 deal will be a stampede to get to that gate first. to take advantage of that so they have another issue. but that will be another issue, i think. but the cultural issue, you know, i think it the other airlines, it's your job as leaders to improve the culture because it's definitely ail cultural issue. i fly basically weekly. there's times i'lling out on the tarmac because of weather, there are delays. it's nice when the pilot comes on and says, we've just heard from air traffic control, we'll be delayed 20 or 30 minutes. we just heard from d.c. or whatever.
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it's already if you have to use the restroom. you can use the restroom. you can turn on your phone and we'll tell you when to turn it back off. versus they stop and don't do anything. that's the whole cultural thing. i'm glad to see it has to function to work. my question i have, and i don't know the answer, do airlines still have reciprocal agreements or not? >> united airlines, we have integral agreements to carry customers on most of our competing airlines. in fact, with american, delta with our big -- >> i just want to make sure. i know years past, issues came off the gate if you're x, y, z or line, we can get you on. that still happens? >> congressman, can i address that? >> yeah. >> prior to the regulation in
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1978, the agreements were ubiquitous, so basically it was on the airline not the passenger. airline "a" with overbooking, cancellation, the change would be accommodated for the face value of the ticket on another carrier. those inter line agreements post the regulation were sustained on the part of the airlines in some case and not in others. and when there was an influx of low-cost carriers in the 1990s, major carriers started using interline agreements as a competitive tool at the expense of passengers by not interlining with startup and newer airlines. now, we have a situation where even some major airlines don't interline with one other. their feuds are one thing. but the fact is this affects passengers in a very negative way. >> anybody else want to respond? go ahead. >> yeah, i would just say, broad
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generalizations are one thing. but i think most -- all major airlines have inter line agreements i think that's the case with alaska airlines. >> i think let the market work with some agreement. i think competitive with competition, the situation arises where it's out of control, weather or mechanical failure, we need to put the customers first. that's how you keep congress off your back. i mean, put the customers first. let's make sure you're expounding a culture out there that puts customers first. because that is to happen. if the culture is right, coming from the top, i don't believe that will happen. because there would have been -- you can't tell me there's not other paying customers on that flight that wouldn't jump at a chance for $1,000 or $2,000 to take a flight a couple hours later. it's hard to believe that's the case. so, i guess that's what my criticism is, definitely a cultural problem.
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i'm glad to see, in your written testimony, your oral testimony, you're fixing to address that. i think that's really where it starts. and i think if all of your team members understand that the customers come first, make it work the best, this is how we solve this problem. let the market forces work. i yield back. >> i thank you, gentlemen. i'm going to have to step out for a little bit. i think i'll be back before this is over. but i just want to make sure that i say this, because i think it's so important that, you know, in every bad situation, there's a silver lining. you usually find a silver lining. and if the airline industry doesn't find a silver lining to get collectively to figure this out. because if you don't, just like mr. gibbs said and mr. capuano said, we're going to act. and if we act, it's going to be one size fits all. it might be okay for united and american, or alaska or jetblue, or whoever the case is. i'm pretty sure i'll be back but
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i'm sure that should be the take-away from today. seize this opportunity, because if you don't, we're going to come and you're not going to like it. with that, i'll yield to mr. duncan. and i recognize for five minutes. >> thank you, mr. chairman. one of the things that you recognize, the self-regulation that you're going to ensure that you pay attention to it. but i would wonder whether it's going to be a irregularly or insii inconsiste inconsistent. how often would you you review yourself? >> i think in a regular course between united internally through our board. >> how often? >> our boards meet five times a year. so, at least that many times. internally to the open public, we have 186 million customers out there every day. to everyone's concerns and thoughts, we hear from them very
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frequently, with regards to those. so, i have an old saying from a long time ago. that it's about proof and not promises. so what you've seen from united, in the 18 months i've been there anyway, everything we said we were going to do, we delivered upon. so, it will be a constant stream of new announcements that enhance what we've talked about. and a follow-up on the issues. with regard to the policies we put in place, everyone will have to be a judgment. >> to the relevant ost of you. >> congresswoman, in the case of alaska airlines, we are constantly holding ourselves accountable from a customer service and a customer satisfaction standpoint. so much so that we actually have customer satisfaction metrics as part of our employee compensation. as part of our employee incentives. those are watching very closely by all of our employees, all 19,000 of us, and those are addressed every month. >> i would say the same for southwest. customer service measures are the part -- particularly our
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leaders are compensated. so we review those often. second, with the change, we will no longer overbook as part of the oversale. and we expect that to go down to boarding 80%. and we will watch that every single week. >> we receive customer feedback in multiple forms and we pay attention to all of it and take it seriously. we have a team at america that we call our customer advocacy team that consist of leaders around the airline and we meet monthly to review feedback, review our policy and make changes to continue to improve. >> but are they implemented immediately? >> they're implemented as quickly as we can. if it's eye simple policy change, yes, immediately. if it's something that requires a technology change it may take us a little longer to get it done. >> mr. munoz do you have any comments? >> yes, thank you, congresswoman. we've heard a lot about retraining and improvements. and we certainly want to give credit where it's due for that.
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but i do think that there's an underlying issue here, and that is that it really shouldn't take a media event and a viral social media, you know, outcry to make executives in this industry rethink how they treat their customers. >> thank you. mr. mcgee, do you have any comment in the training that is afforded the employees in so far as mental health is included? anything to help the employee deal with customers who are acting odd? or on a personal basis, or self-improvement, i fly twice a week. so, i've seen it all. yet. i've encountered every now and then a very rough attendant. will it be because of stress, would you indicate that any training is given to them to be able to deal with mental health problems if they arise? >> i think it's an excellent question, congresswoman.


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